MBA diary: Energy booster

Hartmut Leidreiter took part in the renewable-energy bootcamp run by Vlerick Business School. He left believing that a target of 100% renewable energy is achievable

RENEWABLE energy is now mainstream. Not only is it cleaner than fossil resources, but today it can also compete on cost. Since 2013 the world has been adding renewable capacity at a faster rate than more-polluting alternatives. In 2015 an estimated 147 gigawatts in new renewable capacity came online, the largest increase ever.

Do we dare dream of a world in which 100% of our energy is created sustainably? And, if so, how do we achieve it? As an executive board member of one of Germany’s largest energy cooperatives, these were precisely the questions I hoped to find the answers to when I participated in the three-week Vlerick Business School Energy Bootcamp as part of my full-time MBA at the school.

The overall objective of the bootcamp was to give students in-depth, practical knowledge of how to set up a renewable energy business. Vlerick has a strong grounding in energy markets, so I was particularly keen to learn about how renewable-energy operations require different business models to thrive and how technological innovation can quickly change the outlook in the sector.

Central to the experience was the chance to work on a real-life energy business case with Durabilis, an “impact investing” company that works in a number of developing countries. We were given the challenge of producing a robust business model and a plan to invest in a renewable energy start-up in West Africa.

Throwing myself into the task, I quickly realised that not only is the sector dynamic, it also attracts diverse stakeholders. Because we want citizens to install their own renewable-energy systems, this includes people who are used to being passive consumers of conventional energy. It also became clear that moving to 100% renewable energy means more than changing the fuel in our energy infrastructure. It is no longer about the technology or costs. The real barrier is political will, especially in the developing world. But as an investment of $1 into renewable energies in a developing country can raise national GDP by around $15, according to Marcus Wiemann, of the Alliance for Rural Electrification, an industry group, surely the incentive is there to act?

After a packed three weeks interacting with energy financiers, experts, technology providers, policy institutions and my fellow MBA students, it seems to me that there are three crucial elements to setting up a successful renewable-energy business in a developing market:

Have a clear vision and mission
Entrepreneurs need a clear idea of what they want to achieve and what kind of impact they would like to make. Assuming that the technology is available, it is a question of whether there is a coherent business idea backed up with a strong financial base and potential revenue stream. This must include determining the role of various stakeholders.

Establish a strong network of partners
Whether the entrepreneur is a local or an international company starting a new business, it is essential to have a strong network in the region. This is not limited to potential financiers or partners for distribution or installation. It must engage with new stakeholders, including NGOs that understand the culture of local people and policy makers.

Make empowerment a priority
Many entrepreneurs take an inside-out view. They use existing technology and try to place it in the new market with a business model based on a western way of thinking. However, in rural areas of developing countries where there is little energy infrastructure, there are usually different ways of running a business or leasing and renting technologies. It is therefore important to train and empower local citizens to establish the energy system rather than making them dependent on something which is new to them and they will never be able to drive independently. The role, and indeed the objective, of the entrepreneur should be to empower people by sharing ownership and educating them in order to become both consumers and producers of electricity.

The Vlerick Energy Bootcamp taught me that a target of 100% renewable energy is achievable, but there is a long way to go. To reach our goals, governments, policy makers, companies and the general public must come together. I, for one, will leave business school with more determination and deeper knowledge to make this dream closer to a reality.

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